An E&E Special Report

POLITICS

Democrats cry foul over GOP's attempts to tie fuel prices to EPA

Elana Schor and Sarah Abruzzese, E&E reporters

E&E Daily: Friday, March 11, 2011

House Republicans' move to join the two most politically volatile threads in the Washington, D.C., energy debate -- gas prices and U.S. EPA rules -- sparked Democratic charges of deception yesterday and silence so far from the Obama administration.

Speaker John Boehner (R-Ohio) amplified the GOP gambit as he laid out a new project, dubbed the American Energy Initiative, calling for more domestic fossil-fuel production, new nuclear power plants and an end to EPA's authority over greenhouse gases. While the Republican message had percolated all week, Boehner's decision to spotlight the anti-EPA bill now sailing through the House Energy and Commerce Committee gave the gas-price charge a far broader platform.

The administration's offshore oil-production policies and regulation of greenhouse gases, Boehner said yesterday, represent a systematic hit to economic growth. "If the White House has its way -- and the EPA imposes a backdoor national energy tax -- gas prices will only go higher," the Ohioan told reporters.

Energy and Commerce Chairman Fred Upton (R-Mich.) began invoking the effect of EPA emissions rules on fuel prices earlier this week, citing cost estimates from a 2009 study of the now-defunct House climate change bill (E&E Daily, March 9). But Democrats were still perplexed by the elevation of that argument, with several accusing the GOP of stretching the boundaries of logic to serve its political goals.

"If they could fool people into believing there's a connection, I think they would gain some political mileage, but it's all deceptive," said Rep. Henry Waxman of California, the Energy and Commerce panel's top Democrat and a chief author of that 2009 climate bill. "There's no connection to EPA regulating greenhouse gases for certain stationary sources by requiring them to be more efficient and the price of gasoline."

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In fact, Waxman added, large-scale emitters are more likely to reduce their fuel consumption in response to the EPA regulations, saving industry more money. Another senior Energy and Commerce Democrat, Rep. Jay Inslee of Washington, raised similar points by billing the emissions rules as "incentives for industry to make investments" in efficiency -- with no direct effect on gas prices.

"We're locked into higher oil prices, and the only way to get off of it is finding efficiencies," Inslee said in an interview.

As for Republicans' chances of scoring politically with their new strategy, Inslee quipped: "You can repeal the Clean Air Act. You can't repeal the First Law of Thermodynamics. You can't repeal the law of supply and demand. ... People realize there are much bigger forces on gas prices than the Republican caucus."

Senate Environment and Public Works Chairwoman Barbara Boxer (D-Calif.) appeared nonplussed upon hearing about the Republican strategy.

"They're ignoring the political upheaval in the Middle East and the fact that we're not moving fast enough to alternative fuels and clean vehicles," she said. Of the 2009 study employed by House Republicans, she added: "It's funny that they're blaming a law that didn't pass for high gas prices."

Yet the rhetoric was not confined to the House side of the Capitol. The ranking Republican on Boxer's panel, Sen. James Inhofe of Oklahoma, delivered a floor speech blaming the White House for rising gas prices and dismissing the impact of recent unrest in the Middle East.

"[A] lot of people are saying that the gas prices that are going up are a result partially of what's happening over there," Inhofe said. "That isn't the real problem. The real problem is a political problem."

Several Democrats, however, found problems with the factual basis of the relationship between gas prices and greenhouse gas emissions limits that would apply to refineries and power plants starting in 2012. Rep. Emanuel Cleaver (D-Mo.), for one, termed the argument "bizarre."

"It reminds me of somebody who ate a hamburger and then ends up catching pneumonia and then says, 'Hamburgers cause pneumonia,'" Cleaver said.

EPA did not respond to requests for comment last night.

Refiners' avowals

In addition to the 2009 study of the House-passed climate bill, Energy and Commerce aides pointed to testimony and supportive letters from refiners who hailed Upton's plan to revoke EPA power over greenhouse gases under the Clean Air Act.

"Every credible economic analysis that has been performed shows that Americans will pay higher prices at the pump and that the refining sector, its high-paying jobs and our nation's energy security will suffer as a direct result of EPA's action," Valero Energy Corp. CEO Bill Klesse wrote in a Wednesday letter to Upton.

Rep. Ed Whitfield (R-Ky.), who chairs the House Energy and Power Subcommittee, cited such testimony as the reason the Republicans are pushing for legislative changes.

In some cases, Whitfield said there is not even technology available to deal with new EPA mandates. "The additional costs that they would have to go through and investments they would have to be making to try to start complying would increase the price of gasoline," he said.

Another letter of support from 16 trade associations, including the National Petrochemical and Refiners Association and the U.S. Chamber of Commerce, praised the economic benefits of restricting EPA regulations but did not specifically address gas prices.

However, in recent testimony before the Energy and Commerce Committee, a top executive at Arkansas-based refiner Lion Oil Co. directly linked the EPA regulations to higher gas prices. New fuel-efficiency standards for vehicles drove up costs for his industry by reducing demand, Lion Vice President Steve Cousins told House members last month, and legislation blocking EPA's greenhouse gas rules would be "necessary to protect consumers, farmers and truckers from higher gasoline and diesel fuel prices," he said.

Rep. Ed. Markey (D-Mass.), the co-sponsor of the climate change bill that passed the House two years ago, said flatly, "the EPA has not done anything to increase gas prices."

That's a point Whitfield acknowledged as well.

"I'm not saying it's contributing to it right now, because the regulations haven't been finalized but we're talking down the road," he said.

Markey dismissed the GOP argument as a distraction from larger issues like the unrest in the Middle East, which is influencing American energy prices.

"Instead of focusing on Gaddafi and the other Middle East dictators, they have decided just to use it as a way of engaging in partisan political finger pointing, and I just think they have no credibility," Markey said.